Indications: Futures point to third straight day of U.S. gains

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By Kate Gibson & Steve Goldstein, MarketWatch

NEW YORK (MarketWatch) -- U.S. stock futures pointed to a third day of gains Tuesday after equities rose overseas and as the recent pickup in M&A activity continued.

S&P 500 futures rose 6.2 points to 1,120.8, and Nasdaq 100 futures rose 10.75 points to 1,853.5, while futures on the Dow Jones Industrial Average climbed 50 points.

MarketEdge: Emerging-market 'pause that refreshes'

Market Edge: Flagging stock markets in emerging Asia and Latin America represent the "pause that refreshes," CLSA equity strategist Chris Wood tells Laura Mandaro on the sidelines of the brokerage's San Francisco conference. He recommends overweighting EM equities by five times relative to benchmark indices.

Merger news and encouraging economic data had pushed U.S. stocks higher Monday, with the Dow Jones Industrial Average rising 0.8% to come near to its 2009 close. The S&P 500 rose 1% and the Nasdaq Composite climbed 1.6%. See Market Snapshot for Monday.

The automobile sector will be in the spotlight Tuesday as its sales for February will be reported

In other industry news, General Motors joined rivals in announcing a recall, in GM's case a recall of 1.3 million compact cars over power-steering trouble.

Economists at Barclays Capital expect the worst month since September 2008, citing recall troubles at Toyota Motor /quotes/comstock/13*!tm/quotes/nls/tm (TM 74.30, +0.66, +0.90%) as well as bad weather.

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There's little else on the U.S. economics calendar as attention begins to focus on a payrolls report slated for Friday.

Overseas, Australia hiked its key interest rate to 4%, while the Bank of Canada is expected to keep its benchmark rate unchanged at 0.25%.

Terra Industries /quotes/comstock/13*!tra/quotes/nls/tra (TRA 45.93, +4.73, +11.48%) jumped nearly 13% to $46.40 a share as CF Industries /quotes/comstock/13*!cf/quotes/nls/cf (CF 104.01, -3.53, -3.28%) entered a $47.70-a-share bid. That bid trumps agreed-upon terms of a bid from Yara International, although the bid from the Norway-based firm is entirely in cash and the CF offer consists of $37.15 a share in cash and 0.0953 CF shares. See full story on CF's bid for Terra.

Qualcomm /quotes/comstock/15*!qcom/quotes/nls/qcom (QCOM 37.44, +1.88, +5.29%) rose 3.4% after increasing its stock-buyback authority and increasing its dividend by 12%. Read more about the Qualcomm move in After Hours.

A Morgan Stanley technology conference featuring presentations from Microsoft /quotes/comstock/15*!msft/quotes/nls/msft (MSFT 28.87, -0.15, -0.52%) , International Business Machines /quotes/comstock/13*!ibm/quotes/nls/ibm (IBM 128.19, -0.38, -0.30%) and AT&T /quotes/comstock/13*!t/quotes/nls/t (T 24.86, -0.14, -0.56%) also may garner Tuesday attention on Wall Street.

Asian markets were generally higher, as the Nikkei 225 climbed 0.5% in Tokyo, while stocks in Europe rose as gains for Allied Irish Banks /quotes/comstock/13*!aib/quotes/nls/aib (AIB 2.80, +0.09, +3.32%) after its 2009 results were countered by further losses for Prudential PLC /quotes/comstock/13*!puk/quotes/nls/puk (PUK 14.47, -1.66, -10.29%) on its planned acquisition of AIG's Asian operations.

Both the euro and the British pound were weaker Tuesday, though sterling was well above the worst levels of Monday, when a combination of factors, including polls on an upcoming election and the Prudential deal, combined to hit the U.K. currency.

Copper futures were weaker by 0.5% as supply fears after the China earthquake abated.

Kate Gibson is a reporter for MarketWatch, based in New York. Steve Goldstein is MarketWatch's London bureau chief.